Just one child is doomed for China to surpass the United States.
China, once a powerful economic growth engine expected to overtake the U.S. economy in just a few years, is not expected to grow faster than the U.S. until the 2040s—if at all.
That’s largely thanks to China’s 1979 one-child policy, which caused devastating growth, said Yi Fuxian, a Chinese demographer at the University of Wisconsin-Madison.
Plummeting birth rates and economic problems have erased the annual growth rate of more than 6% China reported before the COVID-19 pandemic.
Fu Xian said that many economists in China and the West were deceived by the Chinese Communist Party’s exaggerated official data, which greatly overestimated China’s consumption power.
A Goldman Sachs study found that China’s population will begin to shrink in 2022, just 13 years later than neighboring Japan. Its decline is expected to be even deeper, severely damaging the country’s economic prospects, according to the Financial Times.
China’s GDP is $21.6 trillion—only two-thirds the size of the U.S. economy.
Yi told The Washington Post that decades ago, Chinese official statistics systematically inflated the country’s birth rate and total population figures.
Although official reports put China’s population at more than 1.4 billion, Yi Gang calculated that the true number in 2020 was “less than 1.28 billion,” at least 130 million less than reported.
Yi, the author of “Empty Nest, a Great Power” published in 2007, criticized China’s one-child policy, said India actually overtook China to become the world’s most populous country a few years earlier than officially acknowledged.
The United States is the third most populous country in the world, with a population of 342 million, about a quarter of China’s population.
Yi believes that China’s population actually started shrinking in 2018, four years earlier than Goldman Sachs’ estimate and more than a decade earlier than the official forecast of 2031 to 2034.
Much of this can be attributed to China’s notorious one-child policy, which seeks to limit Chinese families to one child per mother for fear of spiraling population growth and widespread poverty.
Although the policy was relaxed to two children per couple in 2016 and to three children per couple in 2021, China’s total fertility rate remains one of the lowest in the world.
China is no longer poor – according to official statistics, the proportion of people living in extreme poverty is 0%, compared with 88% 40 years ago.
But it’s not rich either; GDP per capita is about $13,800 per year, about 15% of that of the United States.
By this measure, Türkiye, Russia and Kazakhstan are all wealthier than China.
Yi said that in 1991, China’s total fertility rate was below the replacement level of 2.1 and has continued to decline significantly, falling below 1.0 and is currently estimated at 0.8 children per woman.
Last year, China’s live birth population was only 8 million, a record low. By comparison, the much smaller United States has 3.6 million births.
Yi Gang also blamed former Chinese Premier Zhu Rongji’s economic reforms in the 1990s for causing “many problems” and slowing China’s economic growth and catching up with the United States.
Decades of strict fertility restrictions and fiscal centralization have severely limited China’s household disposable income, which accounts for about 42-44% of GDP.
In comparison, in the United States, this figure accounts for more than 70% of GDP.
Yi said that while this may have helped China’s economy in the short term, allowing it to flood the United States with cheap imports, in the long term it may have signed the CCP’s suicide note.
He explained that children act as “super consumers” and drive the majority of household spending.
He believes that because China has lost generations of children, this has seriously weakened China’s domestic consumption.
To offset weak domestic consumption, China relies heavily on manufacturing exports, an unsustainable real estate bubble and state-subsidized industrial overcapacity, he explained.
These policies “killed China’s economy, population and economy, and also killed U.S. manufacturing,” Yi said.
China is now one of the oldest countries in the world, with a rapidly shrinking labor force and an aging population. By 2050, the median age is expected to be 59 years old, compared with 44 years in the United States.
Yi Gang believes that this means Beijing may never catch up with the United States economically, and worse, may face a long-term economic slowdown.
Yi attributes overly optimistic forecasts of China’s economic growth to mainstream economists and Chinese government agencies relying on fabricated data – assuming that China’s population will soon grow to five times that of the United States.
He said that this is in line with the popular saying that “the East is rising and the West is declining”, but the reality is completely different.
“By 2029 to 2035, China will lag behind the United States in all major population and growth indicators,” Yi Gang said.
However, Yi Gang has a warning for pro-democracy activists who might hope that this demographic time bomb will topple the CCP.
Contrary to Western expectations that economic development would create a pro-democracy middle class, China’s rapid aging has depleted the young population needed to drive political activity.
Only 16% of people in China are aged 15 to 29, down from 31% in 1989 during China’s last mass democratic movement, which culminated in a brutal Communist crackdown in Tiananmen Square.
An aging, risk-averse China is more likely to support a centralized strongman who safeguards pensions and social stability, Yi explained.